India and UK Finalize Historic Free Trade Agreement After Years of Negotiations
- MGMMTeam
- 3 hours ago
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On May 6, 2025, India and the United Kingdom concluded a landmark Free Trade Agreement (FTA), marking a significant milestone in their bilateral relations. Announced by Prime Minister Narendra Modi, the agreement aims to enhance trade, investment, and economic cooperation between the two nations. (Firstpost)
Key Provisions of the Agreement
The FTA encompasses several critical components designed to facilitate trade and economic growth:
Tariff Reductions: India will progressively reduce tariffs on British goods, including a decrease in whisky tariffs from 150% to 40% over ten years, and car tariffs from over 100% to 10%. (Reuters)
Duty-Free Access: Approximately 99% of Indian exports to the UK, such as textiles, food products, and jewelry, will benefit from zero import duties. (AP News)
Social Security Agreement: The Double Contribution Convention exempts Indian workers temporarily in the UK from paying into its social security system for up to three years. (Firstpost)
Enhanced Market Access: The agreement improves access for British service firms to Indian markets and simplifies customs procedures, benefiting sectors like aerospace, food, and medical devices.
Economic Impact and Strategic Significance
The FTA is projected to boost bilateral trade by £25.5 billion ($34 billion) annually by 2040, with the UK's GDP expected to increase by £4.8 billion over 15 years (Reuters). It stands as the UK's most significant trade deal since Brexit, reflecting a strategic move to strengthen economic ties with major global economies. (Reuters)
Conclusion
The India-UK Free Trade Agreement signifies a pivotal development in international trade relations, fostering economic growth and deeper collaboration between the two countries. By addressing key trade barriers and enhancing market access, the agreement lays a robust foundation for a prosperous and enduring partnership.
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